This was a study of produced formation water (PFW) discharged into a shallow tropical marine ecosystem on the Northwest Shelf of Australia. A combination of oceanographic techniques, geochemical tracer studies, chemical and biological assessment methods, and dispersion modelling was used to describe the distribution and fate of petoleum hydrocarbons and added nutrients discharged from an offshore production platform. Using fine scale volatile hydrocarbon data, the horizontal and vertical diffusion parameters for a three dimensional dispersion model were calibrated under local conditions. Trace hydrocarbon chemistry studies and integration of the data into a mass balance model, facilitated a comprehensive description of dispersoin and degradation pathways and rates. Bioaccumulation into bivalves and water column microbial growth inhibition studies confirmed the chemistry and model predictions that the area of potential biological impact extended to 0.5 nautical mile (~900 m) from the discharge with additional skewing in the direction of the predominant tidal flows. Impact would be expected to be concentrated in transient surface slicks and near surface seawater. Dispersion and degradation processes were fast enough to prevent any long term accumulation of contamination within the system. Trace levels of oil in the near field sandy sediments were directly related to the magnitude of the daily discharge. The study is a bench-mark to help predict the effects of further oil industry expansion in this pristine coastal region.